Urgent help please!! EA wants to charge £6k!!

[HolidayHun2020]

Hello, so after months of searching we’ve had an offer accepted on our dream property. The Estate agent has asked for an exclusivity fee (£6k) otherwise they keep marketing the property and accepting viewings. Not sure if it’s a case of - we don’t pay it and then technically we no longer ‘have’ the property as all the paper work came through this evening on email so haven’t had a chance to ask yet. They’ve sent over the contract and if we pull out for any reason other then a RICS appointed mortgage valuation comes back low we lose the £6k - assuming this would be an independent one and not the person the bank sends round?! The money is also held in the EA bank account which feels odd.

There is a clause that says if we do not exchange contracts within the exclusivity period (50 working days) then we forfeit £6k

If we do not pay for searches within 7 days of the sales letter being sent out - we forfeit the £6k.

Has anyone experienced this before? We asked a friend of a friend and she said it is technically allowed but unethical. I now don’t know whether to proceed with this property as it makes me really uneasy - it was slightly over budget anyway so if the surgery threw up anything really bad it could be a disaster!!

There is nothing in the contract which says how the money will in theory be taken off of the sale.

EA's are not obliged to take it off the market, any many do keep viewings going until finance is agreed. However, charging £6k for the exclusive offer is madness.

I would walk away and make sure the sellers knew exactly why. But I wouldn’t be able to easily swallow losing £6k so that’s a bigger risk for me than it might be for someone else.

0 chance!! There’s always another house.

I would walk away - there are far too many variables outside your control to agree to this, especially if you need to sell a property as well.

Thanks for the responses all! Going to speak to the EA today and see what they say - we are no way paying it. We really do love the house so would consider proceeding on the basis that they change it to under offer and follow the usual procedures. I wouldn’t trust them though to find another buyer - maybe we do just walk away 🙃

I'm pretty sure that I'm correct in thinking that the EA can enforce the Modern Method of Auction regardless of potential buyer's views as the SELLER is also bound by contract to proceed under those terms until the contracted period of time expires.

Wouldn't touch this with a barge pole. What if your searches or building survey throw up a major issue? Then you'll lose £6k.

Well exactly - the chances of us holding on to this £6k are slim to none

If MMA is such a superb method of selling, why isn't every estate agent doing it?

Let's imagine you bite, pay your 6k, cant complete for reasons entirely outside your control and forfeit the money. Then along comes Joe Soap, he falls in love with the house and pays his 6k, can't complete for reasons entirely outside his control and forfeits the money. Then along comes Fred Bloggs, he falls in love with the house..........

Do you get a whiff of money for old rope....?!

I wouldn't touch it with a bargepole. So if searches comes back saying it was built on a landfill site and in approx 50yrs there'll be a sinkhole in your living room, you lose £6k for pulling out? If survey discovered it's been made of cheese rind instead of brick, you lose £6k for pulling out? Fuck that shit. I wouldn't go ahead without it coming off the market, it's like throwing money down the drain to start paying for things knowing at any moment they'll happily sell to someone else and what's more, are actively looking to do so.

Good that you have decided to decline their tempting offer!
Putting it in writing might be effective.

Hi All,

Thanks for all the responses said we wouldn’t be paying it, they offered to put a couple of clauses in and said of course as long as we had complied the the house buying process (searches, surveys etc) they wouldn’t keep the money but all felt so dodgy and our solicitor advised us against it and we said no - they said they will pass this on to the seller and it’s at their discretion whether they want to proceed or contact one of the other offers. Really sad and do wonder if we’ve done the right thing because of the clauses and how much we love the house but there you go! It’s made me feel sick with stress and it’s really put a dampener on the whole experience. We would have been so excited to have had an offer accepted but it was tainted by this whole experience.

The seller might come back and say yes but I doubt it.

I'm glad you've taken your solicitor's (expensive!) advice and imagine how ill you would have become with that amount of stress going on, unrelenting, for weeks.

You have done the right thing. My understanding from your earlier posts was that this was an agent fee. Is this, in fact a fee that would be transferred to the seller if you pulled out for any reason? If the whole system were over hauled and deposits were taken from both buyer and seller to be given to the other if anyone pulled out for any reason (with a few exceptions), that would be reasonable. Trying to impose a one sided bond in a falling market is pretty bad for business. I would be surprised if other potential buyer (if there are any) would be interested in this condition.

I'd be tempted to write a stiff letter to the EA talking about the cost of living and how difficult things are for first time buyers currently even without this nonsense, and copy in one or two consumer-type journalists. It may be legal but it is unscrupulous and racketeering behaviour. To be honest though I've only ever met one estate agent I couldn't apply those adjectives to and she was sacked a month or two after I met her.

OP I'm sorry this is stressful. House buying can be exciting but it is rare that the excitement is greater than the stress. I think you made the right call.

Surely it’s a buyers market right now and I would’ve thought the sellers would be delighted to receive an offer!

Personally I would make the offer but make it conditional on not entering into that £6K thing but ask that marketing stops (if you’re in a proceedable position at the moment). They can take it or leave it.

You’ve done the right thing
Hopefully others will think the same way but you can’t control that 🤞

Where in Europe? Not being combattive, just interested. I don’t know how that works, presumably everyone has to do all the legal and and property enquiries before making a binding offer? Because otherwise you could be buying a house without proper title, or selling to someone without the money.

it certainly isn’t the case in France. Even after the ‘compromis’ , where both parties sign the sale agreement in each other’s presence, and hand the deposit over to the agent or notaire, ( equivalent to English exchange) there is a ten day cooling off period when both sides can pull out for no reason at all . Always a big sigh of relief when the ten days are over!

OP, this used to be a feature in the 1980’s , when it was known as a ‘contracts race’ - although I never heard of anyone extorting money not to do it. It’s nonsense IMHO.

I would be inclined to contact the vendor and say politely that you can’t possibly commit to such a practice which is outside the normal procedure , and may not be legally protected : how is the non competition enforced? What legal comeback do you have if they don’t abide by it?

If the vendor shrugs and persists, probably going to be trouble all the way, and they may try to run off with some of the fixtures as well. ( don’t laugh, I once bought a house where the vendor had stolen the door handles)

In some of the scenarios the contract outlined it would be split with the seller but the one about the exchange time period it just said we ‘forfeit’ it.

It now makes sense why so many of their properties stay online and look available for weeks after they have sold!! Could never work it out.

Checked with them and if we weren’t to pay it and the seller goes ahead then they would continue to actively market the property, have viewings and offers until the mortgage valuation is complete.

In all honesty, it’s potentially very cut and dry from the sellers POV and it’s the agent that is causing all of this havoc.

So it's not even the sellers condition!!
Absolute piss take!